Twenty-seven structured products, including offerings from Adequity, Banque de Gestion Privee Indosuez, Banque Privee 1818, BNP Paribas, Caisse D'Epargne, Credit Agricole, Federal Finance Gestion, Hedios Vie, i-Kapital, Natixis, Nortia, Primonial and Societe Generale, were added to the SRP France database in June.
Equity indices continued to dominate the market with twelve of the new products linked to strategy indices; nine linked to the Eurostoxx 50; and one linked to the domestic Cac 40 index.
The Euro iStoxx Equal Weight Constant (EWC) 50 was featured in six products, including three products distributed by Primonial. "While our competitor's price on the [Cac 40 or Eurostoxx 50] over and over again, we use [the Euro iStoxx EWC 50] which we find very efficient in terms of pricing for customers that hope to benefit from a moderate growth of the stock markets," Brice Gimeno, director structured products at Primonial. "We are fully satisfied with the performance of this index which have been between 20 to 40% better, depending on maturities, added to our tight risk control."
i-Kapital also opted for the Euro iStoxx EWC index in two of its products because the cheaper options allow the firm to provide more capital protection. "Whereas by using Eurostoxx 50 we would have to set the barrier at 50%, with the Euro iStoxx EWC 50 we were able to set it at 70%," said Yoni Kabalo, partner at i-Kapital.
Natixis licensed the newly launched Euro iStoxx 70 Equal Weight Decrement 5% Index to be used as the basis for structured products. The licensing of the index is in line with the French bank's increasing concentration on smart beta and risk control underlyings, and follows the launch earlier this year of the NXS Climate Optimum Prospective Index, a new composite smart beta strategy of low-carbon stocks designed by Natixis as the underlying of index-linked products, according to Frederic Goasguen, head of index engineering, equity derivatives at Natixis.
Primonial became the first provider to launch a credit-linked note (CLN) in France this year after "strong demand" from the company's retail customers. The firm partnered with BNP Paribas to issue PR Juillet 2016, a five-year note linked to a basket of 10 corporate bonds.
In terms of maturities, seventeen products expired in June bringing to market EUR290m for rollover opportunities. The best performing products in June were Credit Mutuel - CIC's Action Plus 2016, a three-year 80% capital protected fund linked to the Stoxx Global Select Dividend 100 which returned 115% (4.76% pa) and La Banque Postale's Vivoleo Juin 2020 which returned 121% after four-years.
Soft-protected autocallable structures linked to equities took the lion's share in the domestic structured products market in June while insurance products came under fire after a court decision on June 21, 2016 by the Paris Court of Appeal ordered insurer Generali to compensate an investor on the grounds of the non-eligibility of 'complex' structured notes (EMTN) within the meaning of the French regulation (Insurance Code). As a result Axa Thema suspended the issuance of structured notes wrapped as life insurance products in France.
According to recent research by TNS Sofres, one in 10 of the French population holds a unit-linked life insurance policy. Around 50% of life insurance policies sold in France are based on structured notes with more than 3,400 such products sold in the retail market in recent years.
On June 7 the AMF launched a public consultation on the abolition of its classification of collective investment undertakings (FCP). The consultation questioned the current relevance of the classification guidance in the light of upcoming packaged retail and insurance-based investment products (Priips) and Mifid 2 from the European Commission.
The full market review for June will appear shortly.
Axa halts issuance of life insurance products as Generali is ordered to redress French investors for unsuitable sales
I-Kapital goes with Societe Generale for first round of white label structures
Natixis readies iStoxx smart beta range for structured products
Primonial CLN initiated by strong demand from retail clients